New study reveals disparities in use of healthcare benefits by race and class

September 11, 2007Duke Law News

Duke University Office of News & Communications

CONTACT: Melinda Vaughn
(919) 613-7034

Note to editors: Barak Richman can be reached for additional comment at and (919) 613-7244. To obtain a copy of the study, email Melinda Vaughn at

Sept. 11, 2007 -- Minority and lower-income healthcare consumers are less likely to take advantage of mental health and prescription benefits than white and higher-income consumers, according to a study to be published Tuesday by Duke University law professor Barak Richman.

The study, “Insurance Expansions: Do They Hurt Those They Are Designed to Help?” appears in the Sept. 11 edition of the journal Health Affairs. It examines the use of mental health and pharmaceutical benefits by employees who have identical insurance benefits, including equal co-payments.

Richman found that low-income and minority individuals did not utilize these insurance benefits as often as their white and higher-income co-workers. As a result, insurance companies disbursed more healthcare dollars to whites and higher-income individuals, leading to a likely “wealth transfer” from nonwhites to whites and from low-income to high-income individuals, Richman said.

The findings are contrary to the common wisdom that has driven a trend toward healthcare mandates at the state and federal levels, Richman said.

“It seems intuitive to say that a lot of people suffer from certain ailments and would benefit from care, and therefore we should require coverage so they can get care,” said Richman, whose research interests include healthcare policy. “But this study shows that certain income and racial groups are less inclined to take advantage of insurance benefits even when they have that coverage. So forcing them to pay for coverage they won’t use might not be to their advantage.”

Congress is now considering the Mental Health Parity Act of 2007, a renewal and extension of a 1996 law that required certain employer-provided insurance plans to offer mental health benefits that are equal to those provided for medical and surgical care. Several states also have instituted similar mandates. Such mandates might alleviate disparities in health insurance coverage, Richman writes, but until now little has been known about whether equalizing insurance benefits translates into equalizing levels of health services use.

The study sounds a cautionary note to legislators looking to mandate insurance coverage as a way to expand healthcare services to the working poor and minority populations.

“Arriving at a clearer understanding of the cultural factors and influences that lead to discrepancies between the use of available healthcare resources among white and minority populations should be among our country's major national healthcare priorities,” said Victor J. Dzau, M.D., chancellor for health affairs at Duke University and president and CEO of the Duke University Health System.

Richman’s study examined the insurance claims of more than 20,000 employees of Duke University and Duke University Health Systems from 2001 to 2004. About 68 percent of the employees were white and 24 percent were African American, and the median annual income rose from $36,000 to $40,500 over the four years of the study. These figures roughly reflect the demographic profile of both Durham County, where Duke is located, and the state of North Carolina.

The study showed that whites were significantly more likely than African Americans or Asians to file claims for mental health benefits. (Data for Latino employees were omitted because median incomes and education levels were not representative of the general Latino population in Durham and North Carolina.)

Income also factored into employees’ use of benefits; as incomes rose, employees became significantly more likely to file claims. Similarly, whites were more likely than African Americans and much more likely than Asians to use pharmaceutical benefits, and as incomes rose so did use of drug benefits.

As a result, whites received nearly four times the annual insurance dollars that African Americans received and more than three times the dollars that Asians received in health insurance disbursements for mental health claims. Whites received $140 to $225 more in insurance coverage for drug claims than African Americans did, and about $500 more than Asians.

Richman said he believes the data are representative of national trends.

“These are very large, very representative samples,” he said. “If anything, the findings here are probably more muted than consumption disparities in the country at large because health care is such a pervasive aspect of the economy and culture of Durham. All the employees in this study worked at or near healthcare providers, so they were not impeded by barriers that typically obstruct access to care.”

This study did not attempt to determine the causes of the gap in use of healthcare benefits, but Richman offers possible explanations, including the stigma surrounding mental illness, varying attitudes toward traditional healthcare and differing preferences for delivery of care. For instance, he notes a 2001 report from the U.S. Surgeon General suggests that different racial and ethnic minorities ascribe different values to, and thus have different preferences for, traditional health care.

“If differences in use are a function of differences in preferences, rather than differences in access, then mandates in insurance should be heavily reconsidered,” Richman said. “If policymakers hope to mitigate the nation’s disparities in mental healthcare across race and class, they should be forewarned that insurance mandates might instead heap greater benefits on an unintended and already privileged population.”